You found a report stating that the equivalent annual worth of chemical costs associated with a water treatment process were $125,000 per year for a 5-year period. The report stated that the cost in year 1 was $190,000 and the cost decreased by a uniform amount each year over that 5-year period. However, it did not say how much the decrease was each year. If the interest rate was 20% per year, the amount of the annual decrease, G, is closest to: (a) $27,358 (b) $31,136 (c) $33,093 (d) $39,622
You found a report stating that the equivalent annual worth of chemical costs associated with a water treatment process were $125,000 per year for a 5-year period. The report stated that the cost in year 1 was $190,000 and the cost decreased by a uniform amount each year over that 5-year period. However, it did not say how much the decrease was each year. If the interest rate was 20% per year, the amount of the annual decrease, G, is closest to: (a) $27,358 (b) $31,136 (c) $33,093 (d) $39,622
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
You found a report stating that the equivalent annual
worth of chemical costs associated with a water treatment process were $125,000 per year
for a 5-year period. The report stated that the cost
in year 1 was $190,000 and the cost decreased by a
uniform amount each year over that 5-year period.
However, it did not say how much the decrease
was each year. If the interest rate was 20% per year,
the amount of the annual decrease, G, is closest to:
(a) $27,358 (b) $31,136
(c) $33,093 (d) $39,622
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